The Huge Change McDonald's Just Made With Its Russian Restaurants
After 30 years, McDonald's has just announced plans to shutter all its restaurant locations in Russia. The global burger chain opened its first location in the country in 1990, right after the fall of the Berlin Wall. However, in light of Russia's invasion into Ukraine, the company has stated they plan on selling all 850 of the restaurants in the country to a local buyer, according to QSR Magazine.
On the morning of February 24, 2022, Russia "launched a full-scale invasion of Ukraine," according to Al Jazeera. In March, McDonald's temporarily closed all of its restaurant locations in both Russia and Ukraine, although it continued to pay the salaries of current employees. Now, the company has officially decided to make the closures in Russia permanent.
"This is a complicated issue that's without precedent and with profound consequences," McDonald's chief executive Chris Kempczinski said in a statement, explaining, "It is impossible to ignore the humanitarian crisis caused by the war in Ukraine. And it is impossible to imagine the Golden Arches representing the same hope and promise that led us to enter the Russian market 32 years ago" (via the BBC).
McDonald's is closing all of its Russian restaurants
McDonald's decision to close its Russian locations comes with a cost. Previously, 9% of McDonald's total global revenue came from Russia and Ukraine, and its exit from Russia is estimated to cost the company close to $1.4 billion, per Restaurant Dive. Regardless, the company has determined the conflict has made its ability to remain open "no longer tenable, nor is it consistent with McDonald's values."
"We're exceptionally proud of the 62,000 employees who work in our restaurants, along with the hundreds of Russian suppliers who support our business, and our local franchisees....However, we have a commitment to our global community and must remain steadfast in our values. And our commitment to our values means that we can no longer keep the Arches shining there," Chris Kempczinski said of the decision, per QSR Magazine.
The company's spokespeople have stated that they plan to continue to pay all 62,000 of their Russian employees until the completion of the sale, and have sought assurance from the future buyer that workers will be able to remain employed after the sale goes through. All of the Russian locations will be "de-arched," which means that McDonald's instantly recognizable golden arches, as well as its menu, name, and logo, will be removed from all former restaurant locations. The company has said that it plans to retain its trademarks within Russia. The chain's 108 restaurants in Ukraine remain temporarily closed at the time of writing, per the BBC.